- Strong wage growth and inflationary pressures stemming from the war may pave the way for another BoJ rate hikes, at a time when Japan’s fiscal expansion agenda is in full swing.
- Rising JGB yields may ripple through demand conditions in the SBN market, which is often more influential than developments in the UST market.
- Higher demand from domestic banks and non-bank investors may help keep SBN yields stable, albeit at the potential cost of slower loan growth.
